Earnings dented by government deal
THE RECOGNITION of the full value of WBHO’s socio-economic contribution and financial liability arising from the settlement agreement with the government significantly hurt the listed construction and engineering group’s earnings in the six months to December. The group yesterday said its headline earnings a share for this period was expected to be between 37.5 percent and 42.5 percent lower than than 632.1 cents in the previous corresponding period. This equates to headline earnings a share of between 363c and 395c for the six months to December. In terms of the government settlement, seven listed construction companies agreed to collectively contribute R1.5 billion over 12 years to a fund to be established for socio-economic development and undertake further transformation initiatives in terms of a settlement agreement reached with the government. WBHO’s total commitment in terms of this agreement was R255m over 12 years. The agreement with government settled outstanding and potential civil damages claims by state entities against the seven companies. The group added yesterday that it had achieved satisfactory trading over the period with the exception of a single loss-making project in Australia. WBHO did not identify this project. The group added that its adjusted headline earnings a share for the six month to December were expected to be between 5 percent and 10 percent higher than the 632.1c in the prior period. This equates to adjusted headline earnings a share of between 664c and 695c for this period. WBHO expects to release its interim financial results on February 28.